Talanx Group subsidiary HDI International has brokered a deal to acquire retail operations of Sompo Seguros in a deal valued at $311.45m (BLR1.05bn).

The acquisition is part of HDI’s effort to bolster its operations in the Brazilian market by scaling its existing business and entering new lines of business such as non-motor P&C and life protection.

Germany’s HDI operates in Brazil via HDI Seguros, which employs 1,300 people, with a focus on the motor insurance market.

The deal is expected to rank HDI Seguros seventh and fourth in the P&C and motor insurance market respectively, with its gross written premiums growing to €860m (BLR5.5bn) from €280m (BLR1.8bn).

Talanx Board Member and HDI International CEO Wilm Langenbach said: “This acquisition enables us to continue our success story in Brazil which is the largest insurance market in Latin America with significant profitable growth potential in the mid-and long-term.”

HDI International head of LATAM Nicolas Masjuan said: “The acquisition in our core market Brazil strengthens our market position in some key regions in Brazil, especially in São Paulo, the country’s largest city, and diversifies our portfolio into Life Protection as well as gaining scale in Residential & Property.”

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Sompo Seguros, which is part of Sompo International, operates in retail insurance and industrial lines.

For Sompo, the deal is aimed at reorienting the industrial lines business in Brazil by spinning off the retail business into a new arm and selling it to HDI.

Sompo said: “This strategic change supports Sompo International’s goals of expanding in new and existing geographies, delivering a consistent market approach across all lines of business and strengthening the strategic alignment across Sompo International geographies globally.”